Hugel (145020) Q2 2024 earnings summary

Executive summary

• Revenue increased 17.0% year-over-year to KRW 95.4bn in 2Q24, with strong growth in both toxin and filler products.

• Net income surged 72.7% year-over-year to KRW 37.0bn in 2Q24; H1 2024 net income was ₩59.7 billion, reflecting continued growth in both domestic and international markets.

• Operating profit rose 51.6% year-over-year to KRW 42.4bn in 2Q24, with margin expanding to 44.5%.

• The company maintains a leading position in the botulinum toxin and HA filler markets, with significant overseas expansion and product portfolio diversification.

• Major product lines include botulinum toxin (Botulax), HA filler (The Chaeum), medical devices, and cosmetics, with toxin and filler accounting for nearly 89% of sales.

Financial highlights

• Gross profit grew 13.7% year-over-year to KRW 71.5bn in 2Q24, though gross margin declined by 2.2 percentage points to 74.9%.

• H1 2024 revenue: ₩169.7 billion, down from ₩319.7 billion in FY2023, but in line with seasonal trends.

• Cash and cash equivalents at period end: ₩151.6 billion.

• R&D expenses for H1 2024: ₩8.4 billion, representing 4.94% of sales.

• SG&A expenses decreased 16.7% year-over-year to KRW 29.1bn in 2Q24, supporting margin expansion.

Outlook and guidance

• International sales, especially in Asia Pacific and EU & Others, showed robust growth, indicating continued global expansion.

• The company continues to expand internationally, with product approvals in the US, Europe, and China, and ongoing clinical trials for new indications and products.

• Strategic focus on premium skincare, new product launches, and further penetration in global aesthetic markets.

• Ongoing litigation and regulatory reviews in the US and Korea may impact future operations, but management expects no material adverse effect on financial stability.